Terrorists struck in the capital in a big way on the eve of Diwali on Saturday triggering three explosions in two markets and near a bus killing 55 people and injuring over 155 others, including some foreigners.

The first explosion took place at around 1740 IST in the busy Paharganj market. The market, which is frequented by foreigners, was bustling with Diwali shoppers.

Minutes later another explosion rocked Sarojini Nagar Market in south Delhi, where maximum casualties were reported.

Another blast took place 10 km further south in the Govindpuri area.

Timely action by alert crew of the state-owned bus helped avert a big disaster when they threw out a time bomb which exploded injuring five people, including the driver who is in serious condition.

Union Home Minister Shivraj Patil said 37 bodies were in Safdarjang Hospital while Union Health Secretary P K Hota said seven bodies were brought to Lady Hardinge hospital, four to Ram Manohar Lohia hospital and two to AIIMS.

Police Commissioner K K Paul said that the explosive, which went off in Paharganj, was planted either in a motorcycle or a rickshaw.

Market areas of Paharganj and Sarojini Nagar were choc-a-bloc with shoppers doing their last minute purchases for Diwali next week.

38 deaths were reported from Safdarjung Hospital, followed by 10 in Lady Hardinge, five in Ram Manohar Lohia Hospital and two in AIIMS, police said, adding more than 155 injured people were admitted to various hospitals. The dead included women and children.

The blasts are suspected to be the handiwork of banned Pakistan-based Lashker-e-Toiba outfit.

An alert was sounded in the capital with the police chief asking people to be vigilant.

He said unclaimed objects lying anywhere should not be touched and information about these should be passed on to the police immediately.

The public has also been asked to inform the police about any suspicious persons moving in their neighbourhood in the recent days or any other suspicious movement they might have seen.

Preliminary reports said that just about an hour ago, police had received a call about a bomb placed in a bag in the Paharganj area. But before the police could get to the place, the explosive went off.